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Pepper spray and riot gear

I'm here in Hong Kong this week for the crucial WTO ministerial conference, talking to farmers and experts about the dwindling prospects for a successful trade deal. But for a little while yesterday the world's attention was instead focused on 4,000 protesters out on the streets.

These are the folks who will protest free trade while wearing their tennis shoes made in Indonesia and shirts made in India. They will chant anti-WTO slogans and watch themselves on the news, later, on a television made in Malaysia. They will while away the long hours between demonstrations drinking a beer brewed in a far off country or listening to an Mp3 player made in China.

The city of Hong Kong has done an outstanding job training its police force to be helpful and courteous to visitors while handling protesters with a minimum of violence.

Every two years or so, the world's trade activists drop whatever it is they do to earn a living, drum up some cash for an air ticket, and make their way to wherever the WTO holds its ministerial trade talks.

Some people apparently don't have enough to do.

These WTO meetings are a magnet for the anarchists of the world. Since these folks were able to break up the meetings in Seattle in 1999 they have found a world spotlight for their cause. These days if you go to a WTO meeting, expect pepper spray and riot gear. And since the actual trade talks are closed to the media, guess where the press photographers hang out?

South Korean farmers warned they might try to kill themselves in order to disrupt the meetings, according to a story in yesterday's South China Morning Post. Most of the demonstrations were peaceful, with folks carrying coffins including "WTO - Rest in Pieces" signs (clever). Some of the activists launched a floating protest, throwing themselves into the murky waters of Hong Kong Harbor. The atmosphere became tense when lines of police - there are 27,000 of them in Hong Kong this week - confronted protestors outside the convention center yesterday, but no one was seriously hurt and the protesters have said they will save their energies for the last day of these sessions, Dec. 18.

Some protesters made their way inside the opening session, shouting down WTO Director-General Pascal Lamy as he addressed the ministers representing 149 countries. "The WTO and the crowds in and outside these buildings will remind us, with some sound and fury, that WTO is not the most popular international organization around, to say the least," he said.

Brazilian Foreign Minister Celso Amorim with WTO Director-General Pascal Lamy (right).

Misguided passion
Some so-called 'farmers' were carrying signs that said "WTO kills farmers." I admire their passion, even if wildly misguided.

This meeting aims to lower trade barriers that would in effect help all countries, including the poor, but that doesn't seem to register with these folks. Admittedly, WTO is still somewhat of a rich country club, and yes, free trade might cause short-term hardship for some of the world's farmers. But those who understand their business and make good strategic decisions will thrive in a business climate free of artificial market signals (subsidies and protectionist tariffs).

And free trade will, if done correctly, lift millions of people out of poverty - the stated goal when this round began in 2001.

The protesters want the world to believe WTO is a big faceless international organization brutally twisting the arms of weaker countries to come up with a trade agreement that will destroy their local agriculture. But let's face facts. Farmers in wealthy South Korea still lead a peasant existence in part because their country's protectionist policies never allowed them to learn how to modernize and make decisions based on market signals. Now the South Korean farmers fear trade rules that will allow less expensive rice in from other countries.

I believe these so-called farmer-protesters are simply inefficient producers who have no motivation to modernize. They have strong political power in their home countries. They can still make money because their governments protect them with unbelievable tariffs. You want to import rice into Japan? Go ahead, you'll pay 700% tariff for the privilege.

"Japan is a byword in the world for inefficiently produced and costly rice," notes South China Morning Post's columnist Jake van der Kamp. South Korea is not far behind.

Even Frenchman Jose Bove, the rock star media-darling of the anti-global movement, was able to make an appearance here on behalf of the protesters. This is a guy who is not happy unless he is in handcuffs with a microphone shoved in his face. Raised by Berkeley-educated parents, Bove is a small farmer who has been in and out of jail after wrecking a McDonalds restaurant back in his home country. He was briefly detained upon arrival here yesterday and told to take the first plane back to France. Instead, he called a French radio call-in show on which Lamy, the WTO's director General, was being interviewed. Lamy contacted Hong Kong officials and had Bove released.

Jose Bove, the French radical activist farmer, was able to wiggle out of detention at the Hong Kong airport long enough to join his protester friends at the WTO trade meeting.

Bove repaid the kindness by making this statement in a BBC television interview hours later: "We want to have our own agriculture feed our own population, and we don't want to export our surplus, which is dumping on developing countries," he told reporters. Huh? Guess they don't teach Econ 101 at Berkeley.

In any case, Bove and his pals may get their way, as it looks very bleak for a trade breakthrough this week. Lamy acknowledged the uphill battle with a positive twist. "Reaching agreement in the WTO is difficult because it is done bottom-up — and it is good this is so," he said. "It takes more time, it is more burdensome and cumbersome, but I am convinced it remains the best way to take decisions that impact directly the lives of billions of people."

Even so, the world risks much if this trade round collapses. It could signal a shift to bilateral and regional deals, which are much less efficient in building prosperity. And if no deal is reached by the 2007 deadline, a deal may never be reached. That's the year President Bush will surely lose his "trade promotion authority," the power to negotiate trade deals with an up or down vote from Congress.

Worse, a collapse in the Doha round could bring a series of suits against the U.S. for a broad array of questionable trade policies, including rice, corn and soybean programs, much like the successful case Brazil brought against U.S. cotton. The U.S. would then risk losing those programs without getting anything in return via a fair, worldwide deal.

"If we don't fix the agriculture problem - if we don't find a way to provide real market opportunities for farmers around the world, especially farmers in the developing world - this round is not going to advance," says John Murphy with the U.S. Chamber of Commerce.

That's an outcome Jose Bove might enjoy, but American farmers certainly would not.

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